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Former NHLPA head expects the NHL to add Canadian teams, and soon (Updated)http://blogs.edmontonjournal.com/2013/01/29/former-nhlpa-head-expects-the-nhl-to-add-canadian-teams-and-soon/
http://blogs.edmontonjournal.com/2013/01/29/former-nhlpa-head-expects-the-nhl-to-add-canadian-teams-and-soon/#commentsWed, 30 Jan 2013 03:37:43 +0000http://blogs.edmontonjournal.com/?p=147899On Tuesday night former NHLPA executive director Paul Kelly added substance to long-time speculation that Quebec City and Toronto could receive NHL expansion franchises in the near future. Speaking to city council in Markham, Ontario, where a new NHL facility …]]>On Tuesday night former NHLPA executive director Paul Kelly added substance to long-time speculation that Quebec City and Toronto could receive NHL expansion franchises in the near future. Speaking to city council in Markham, Ontario, where a new NHL facility funded in part with public money is being considered, Kelly expressed his belief that the league will expand to 32 teams in the next few years.

I’ve discussed it with many owners, the commissioner and many players. That’s given me a strong sense that at some point there will be a second team [in the greater Toronto area].

Friedman added that the league sees the Quebec market as “underserved” right now, and that he sees Quebec City and Toronto as the “most likely” recipients of expansion teams.

The greatest roadblock to a second team in the Toronto area is the Maple Leafs, who have territorial rights. Kelly told Friedman that he believes that the Leafs would be unable to block an NHL team from locating to the area – although that team would likely need to make financial reparations. Kelly’s take is supported by the league itself; NHL deputy commissioner Bill Daly has previously said that “the whole concept that someone has a veto is just plain wrong. It’s made up. It’s a falsification of the facts.” The Leafs have previously made it clear that they’re willing to fight over that interpretation, though the team’s new owners (Bell and Rogers) might be less inclined to fight a second team in the area given the potential for TV revenue.

It’s worth noting at this point that Kelly is in Markham speaking on behalf of the arena, so it isn’t surprising that he’s playing up the possibility of quick expansion. Regardless, his comments are just the latest indicating that Toronto and Quebec City are the NHL’s preferred target markets. Back in October, The Hockey News’ Jason Kay tweeted that there was “strong speculation” the league would announce two new teams in those cities once the lockout ended; the following was my take at the time:

In some ways, this isn’t a surprising comment. It’s been more than a decade since the NHL’s last wave of expansion, and there have been a number of hints that the league sees itself at 32 franchises eventually – including the attempted realignment to four divisions this past year. There’s a new arena being built with public money in Quebec City and in Pierre-Karl Peladeau there’s a rich man well-positioned to own a team. Meanwhile, the Toronto Maple Leafs are far and away the league’s most profitable franchise – at least based on Forbes’ estimates – and there is no question that the market could sustain a second profitable team.

Those points remain true today, and also indicate the other reason why speculation about Toronto and Quebec City is so rampant: both locations simply make sense for NHL teams.

There’s never been a plan to expand to 32 teams. Whether we talked conceptually at some point if things are going well whether we could expand to 32, I’m sure we suggested we could, but we certainly never reached the point where that was appropriate when Paul Kelly was executive director of the NHLPA and I’d say we haven’t got there at this point…

[O]ur position has consistently been that our rules do not give the Maple Leafs a right to veto another franchise in the Toronto territory. That’s something that the board of governors would decide, if the board decided it was a good idea.

]]>The following statements were issued Thursday by NHL owners Jeff Vinik of the Tampa Bay Lightning, Ron Burkle of the Pittsburgh Penguins, Mark Chipman of the Winnipeg Jets and Larry Tanenbaum of the Toronto Maple Leafs:

Ron Burkle, Co-Owner, Pittsburgh Penguins

The idea to put players and owners together in the same room was a refreshing idea. Commissioner Bettman should be thanked for proposing it and the Fehrs should be thanked for agreeing to it.

The players came with a strong desire to get back to playing hockey. They were professional and did a good job of expressing their concerns and listening to ours. We Wanted to move quickly and decisively. We have all spent too much time Without any real progress at the expense of our fans, our sponsors and the communities we serve. It was time to make bold moves and get a deal. Many people think We got over our skis and they are probably right, but We wanted to do everything we could to get back to hockey now. We didn’t hold

We made substantial movement on our end quickly, but unfortunately that was not met with the same level of movement from the other side. The players asked us to be patient and keep working with them. |t’s not what they do and they Wanted us to know they were committed.

We understood and appreciate their situation. We came back with an aggressive commitment to pensions which we felt was well received. We needed a response on key items that were important to us, but We were optimistic that we were down to very few issues. I believe a deal was within reach.

We were therefore surprised when the Fehrs made a unilateral and “non-negotiable” decision – which is their right, to end the player/owner process that has moved us farther in two days than we have moved at any time in the past months.

I want to thank the players involved for their hard Work as We tried to reach a deal.

I hope that going backwards does not prevent a deal.

Mark Chipman, Chairman and Governor, Winnipeg Jets:

“I’d like to thank the NHL for giving me the opportunity to participate in this very important process.

I came here optimistic that we could find a solution. That sense of optimism grew after our first few sessions, including the small group discussions late last night.

Regrettably, we have been unable to close the divide on some critical issues that we feel are essential to the immediate and long-term health of our game.

While I sense there are some members of the players association that understand our perspective on these issues, clearly there are many that dont.

I am deeply disappointed that we were unable to bring this extremely unfortunate situation to a successful conclusion and I wish to apologize to our fans and sponsors for letting them down.”

“I was pleased to be asked to join the Player/Owner negotiation sessions. I had hoped that my perspective both as a businessman and as one of the owners of the Toronto Maple Leafs would be helpful to the process. Like all other teams, this work stoppage has hurt our fans, our employees and our business. Neither the owners nor the players will ever recover the losses incurred with this work stoppage.

I understand how important it is to have a strong league and 30 healthy teams. I must admit that I was shocked at how things have played out over the last 48 hours. The sessions on Tuesday felt cooperative with an air of goodwill. I was optimistic and conveyed my optimism to the Board of Governors at our Wednesday meeting. However, when we reconvened with the players on Wednesday afternoon, it was like someone had thrown a switch. The atmosphere had completely changed. Nevertheless, the owners tried to push forward and made a number of concessions and proposals, which were not well-received. I question whether the union is interested in making an agreement.

I am very disappointed and disillusioned. Had I not experienced this process myself, I might not have believed it. Like all hockey fans, I am hopeful this situation can be resolved as soon as possible. I miss our game.”

Jeff Vinik, Chairman and Governor, Tampa Bay Lightning

“After working this week with our players toward what we hoped would be a new agreement, owners presented a proposal we believed would benefit those great players, ownership, and, ultimately, our fans for many years to come. While trust was built and progress was made along the way, unfortunately, our proposal was rejected by the Union’s leadership. My love for the game is only superseded by my commitment to our fans and I hold out hope we can soon join with our players and return the game back to its rightful place on the ice.”

Follow the sequence of events: Donald Fehr, the NHLPA executive director, calls league commisioner Gary Bettman Wednesday. Here’s the gist: “Uh-oh, Gary, it seems we’ve run out of ideas. Seems we don’t know what to talk about.”

Bettman called back the next day to tell the older Fehr that in that case it might be wise if the two sides took a bit of a vacation from one another, say, for a fortnight, but never mind, anytime you have an idea, you know where to find us.

The older Fehr said he would have to ask his membership if they’re OK with it, as if he never decided a matter or two on the spot and had his membership rubber stamp it afterwards. In any case, that was gall of the purest variety.

Doesn’t matter.

A little bit later, younger Fehr, Steve, issues these words of wisdom: the NHL is sabotaging our sincere effort to have matters mended. We won’t get to any deal if we don’t talk. We want to meet, but they (meaning the league) don’t.

In gentlemanly English this is called “being economical with the truth.”

Next thing you know, Maple Leafs forward Joffrey Lupul, the guy whose union conscience is at peace with itself even though he caused a guy in Russia to lose his job. Now an Avtomobilist Yekaterinburg forward, Lupul announced that, indeed, the league is public enemy No. 1 because it doesn’t want to meet with the NHLPA.

And, not to be left too far behind, Red Wings’ defenceman Ian White, a philosopher if there ever was one, went on public record as saying that Gary Bettman is an idiot. That got even some of his union brothers tut-tutting and suggesting that an apology might be in order. Of course, they wouldn’t say so publicly. Solidarity, you know.

For the benefit of the passionate, let’s summarize it: Donald Fehr tells Gary Bettman he’s got nothing to talk about. Bettman responds by suggesting a fortnight’s worth of a moratorium, adding if the NHLPA finds a brilliant idea, give us a call anytime, you know where to find us. What’s so tough here to understand?

Following which a few former NHL players who now serve as talking heads on sundry television networks, have shown themselves worthy of doctorates in forensic psychology, specializing in psychoanalysis (but, obviously, not psychotherapy). The league, they said, wants to intimidate the players by making this move. It won’t work, they all added. If you try to intimidate a hockey player, he’s going to fight back.

Let’s summarize it again for the slower-witted: Donald Fehr tells Gary Bettman he’s got nothing to talk about. Bettman responds by suggesting a fortnight’s worth of a moratorium, adding if the NHLPA finds a brilliant idea, give us a call anytime, you know where to find us.

Have you detected any attempt at intimidation?

Of course, the players are upset: another paycheque gone by the wayside this week, not to come back, ever.

Except they’re barking at the wrong tree.

And why should it be the players to bring in a new plan? Why, simple enough. They rejected the league’s latest proposal, so, it would be expected they must have something better up their collective sleeves. Besides, the NHL told them it would expect their proposal, as the last meeting was winding down in acrimony in New York last Sunday. So, no surprise there.

ESPN.com’s Pierre LeBrun offered his readers a chance to have their say on the latest developments. Their reactions were outright scary. Granted, most of them were Americans, and in their country, hockey is not a front-page activity, but still, the result resembled the infamous 99.99 per cent returns in communist countries’ elections. It was overwhelming. Not a cent are they getting from me again, the greedy swine. A league that just has to have lockouts every six or seven years, whenever its old CBA had expired, isn’t worth my money. Watching the grass grow and paint dry is more fun. Tractor pull contests or poker tournaments on TV are more exciting. Typical reactions. And scary, too, if you are the NHL and are aware you’re skating on very thin ice in the U.S.

That’s what buying into ideology does for you. Donald Fehr wants his employers – the players – to keep earning the same amounts of money they had been earning. And he wants them to have the unalienable right to tell their owners what to do with their business, and how. To sum up, he wants his employers to live in a paradise right here, on earth. He quite obviously is of the view capitalism should be buried, as former Soviet leader Nikita Khruschev used to say, to be replaced by the glorious future of communism.

Look where it got the communist system. Any lessons here?

Nothing against the living-in-paradise-on-earth notion, of course, except it’s not possible. Donald Fehr should be aware of it, but it doesn’t seem to bother him in the least. He’s got an ideological goal, and if he ruins the goose that’s been laying golden eggs galore for decades in the process, so what. Let them eat cake. After all, a corporation unable to survive a couple of lockouts in a decade, has it any right to survive and flourish, anyway?

So there.

Bettman’s deputy Bill Daly tried to put a bit of a more positive spin on things: everybody’s disappointed, he said, and no, he doesn’t think all those attacks reflect any personal hatreds.

Well, that same Daly had a brief telephone conversation with Steve Fehr Friday, and they agreed to call each other over the weekend. Not to shoot breeze, they’re not THAT friendly, but to try and brainstorm their way into a plan how to continue negotiating.

By PETER ADLER
The Cult of Hockey @ The Edmonton JournalWhen you read many players’ (and many readers’) reactions to what’s been going on in the NHL …

]]>But he does care about the NHL losing revenue . . .

By PETER ADLER
The Cult of Hockey @ The Edmonton JournalWhen you read many players’ (and many readers’) reactions to what’s been going on in the NHL lately, you’ll think there’s no bigger villain in the world than league commissioner Gary Bettman. What with the overwhelming, deafening, even, silence that’s been surrounding the talks about a new collective bargaining agreement (CBA) with its players’ union, the NHLPA, the popular sentiment has it that Bettman is as anti-hockey as a Pakistani (or Indian) cricket aficionado.

One wonders, from time to time, if Bettman loses any sleep over all these accusations, or whether he’s content that “noise” is just a part of the entire business. At least, this lockout has been more civilized than its older brother (2004-2005 version). If you care to remember, that’s when Chris Chelios, then of the Detroit Red Wings, said Bettman should be afraid, very afraid, and not only for his safety but for that of his family, too. That statement left many in shock. Chelios would later withdraw, sort of. He didn’t mean he would cause Bettman and / or his family any harm, but there might be social misfits who might. That was Chelios’s excuse.

Of course, Chelios (quite openly, too) belonged to the more militant part of the NHLPA that would never come to terms with salary caps and any other such paraphernalia of modern times. He was perfectly livid when then-executive director of the NHLPA, Bob Goodenow, resigned shortly after the signing ceremony of the CBA. And Chelios was one of those who disliked Goodenow’s successor, Ted Saskin, so much he helped engineer his firing. Saskin didn’t help his cause, either, when it became known he had no moral issues with reading players’ e-mail exchanges. But he would have been gone with or without the e-mail scandal, anyhow.

All that time it was Bettman’s name that was in the mud, as if it was the commissioner, not the owners, who was running the show.

While not too surprising coming from fans who don’t really know who or what runs the NHL, it is somewhat close to shocking, hearing such accusations from the players whom one would have expected to know better than that.

To simplify it: it is the owners who decide the strategy, that is, the goals they want to achieve, and the most Bettman does in the matter is helping to decide the tactics, that is, ways to achieve the goals set by the owners.

It should be the same on the other side, too: the executive director of the NHLPA should be the person implementing the goals his employers, that is, the players, want to see implemented. Judging by the situation as it has developed so far, one wonders more often than not.

Of course, it’s quite difficult to know with any precision who calls the shots. On either side.

The NHL has imposed a gag order on everybody not called Gary Bettman or his deputy, Bill Daly. One statement out of turn can cost the guilty party a pretty penny. See: Jim Devellano and his $250,000 fine.

On the other hand, we can see and hear a number of players making public statements that give their employer, the NHL, such a bad name one wonders the league hasn’t folded yet. The interesting thing here is that it’s mostly always the same guys who make those pronouncements, and that it is mostly the most recognizable stars who speak out. One never hears the third- or fourth-liners say what and how they really feel.

Besides, the last lockout cost about 200 players, veterans, all, their careers. When the NHL resumed play in 2005, they were out, having lost their last season’s wages. Some of these wages went to millions of dollars, money they would never get back.

How much have we heard from them?

It’s quite intriguing to see how many players, mostly Canadian players, are willing to take one for the team. The last lockout cost Calgary’s Jarome Iginla about $7 million. If the NHL loses this season, that same Iginla stands to lose another similar chunk of money. A bit more, actually, but who’s counting, right? Yet, at least publicly, all you hear Iginla say is platitudes about how he hopes the two sides will reach an agreement sooner rather than later, after all.

Meanwhile, 126 NHL players (and counting) are plying their trade overseas, having taken jobs from the locals in a nice sign of solidarity. Also, 71 NHL players are now skating for their teams’ farm clubs, sending other youngsters down (at least) a notch. The domino effect seems to result in kicking some young players out of professional hockey ranks altogether, no matter how low on the totem pole. Besides, 26 players went back to their junior teams, but they are eligible for call-ups if and when the NHL returns. If Nail Yakupov didn’t bolt for Nizhnekamsk of the Russian KHL, it would have been 27 juniors barring other young players’ entry.

And through all of that all we hear is that Gary Bettman is a villain who deserves nothing better than burn in effigy, if not in reality.

Of course, the NHL is quite correct when it doesn’t engage in a spitting match with the NHLPA, even though some of the Fehr brothers’ statements just shout for clarification, to say it mildly, or denial, to say it bluntly. Spitting matches won’t move any negotiations forward one iota.

So what we end up having is a load after load of defamatory statements that would cost the perpetrators nice sums if brought to court, no negotiations, and the perspective of the league cancelling this season’s Winter Classic in a matter of days. If the Winter Classic goes, can the rest of the season be far behind?

If Gary Bettman loses any sleep, one assumes it would be because of THAT, not because of the names fans and some players call him.

High-stakes poker. Neither side willing to be the first to concede even a minor point. The other side might see it as a weakness, and then what?

That, say …

]]>By PETER ADLER

The Cult of Hockey @ The Edmonton Journal

High-stakes poker. Neither side willing to be the first to concede even a minor point. The other side might see it as a weakness, and then what?

That, say the talking heads and sundry members of chattering classes, is the current state of negotiations between the NHL and its union, the NHLPA. And, the talking heads and sundry members of chattering classes are quick to add, the NHLPA has got a valid reason to fear presenting any concessions. Why, after all, during the last lockout, the union offered it would accept a 24-per-cent across-the-board salary rollback. It did so in hopes that the owners would in return scrap the idea of salary caps. And guess what: the league has accepted the rollback, and then rammed the salary caps down players’ throats.

If we are to believe this theory, we’d have to believe that then-executive director of the NHLPA, Bob Goodenow, belonged into a closed psychiatric ward that houses morons. It is perfectly difficult to accept that Goodenow wouldn’t say, OK, we’ll give you a rollback, but only if you give us a solemn promise: no salary caps now and in eternity. The eternity would be negotiated down to the duration of the new collective bargaining agreement, eventually, and that would be it.

Where does it go from now? NHLPA’s executive director Donald Fehr is on record as saying that should the owners kill the entire season, the union’s tacit agreement that salary caps stay will be off the table. The league didn’t bother to reply, at least, not officially, but judging by the noises emanating in the background, this would mean Armageddon: the league will immediately move in to strip the players of the right to guaranteed contracts, something a few militant owners had been mulling in the past, too.

Of course, all of this, while potentially valid, only scratches the surface. These are just battles. The war is about something completely different.

It’s about who the heck owns the outfit a.k.a. the NHL.

When NHLPA special counsel Steve Fehr says his group has submitted three proposals and what more can the NHL want, he’s technically correct. Except, so is his counterpart, league deputy commissioner Bill Daly. The only NHLPA proposal that was new was the one submitted on August 14.

But here’s the major issue the league must have with all of the NHLPA submissions. They all have concentrated on what is known as revenue sharing. Commissioner Gary Bettman has stated several times that this is a minor issue that has got nothing to do with the so-called core economic issues. He could have gone one step further (and, rather wisely, he didn’t). Bettman could have said that revenue sharing is none of the players’ business.

When the league imposed the salary cap concept in 2005, it linked it to the so-called hockey-related revenues (HRR, for short). The idea was the cap would consist of a certain percentage of that revenue. The mistrust between the two sides brought about an interestingly unhealthy situation: the league had to open its books (and its teams’ books, too, and all of this fancy reading material had to be audited, to boot) so players could see whether the NHL wasn’t cheating them out of their minds.

For whatever reason, it gave the players the misguided and unfounded idea that it was within their rights to be telling the league how to go about distributing its revenue, including helping teams that for one reason or another found themselves in dire straits. Who or what gave them this idea remains a sweet secret of the Caramilk chocolate filling kind.

In any case, they seem to have forgotten they do not own anything but their skills. Have they risked a cent establishing NHL franchises? Have they risked a cent running them? Rhetorical questions, both. Yes, they are risking their health and their lives playing the game of hockey at the NHL level, but then again, has anyone forced them to pursue the path of professional hockey players? Another rhetorical question.

Redistribution of income or revenue sharing, whatever you wish to call it, is a shell game governments love to play. They collect taxes from us and then, they feel almost perfectly free to use the money according to their political wishes and beliefs. On occasion, they use our money for purposes that would appall most taxpayers if only they found the time and willingness to check upon their elected representatives’ activities.

And this is it: governments are taxpayers’ employees. Be they elected politicians or bureaucrats, we pay their wages. They should be standing at attention, shuffling their polished boots, when we decide to talk to them. Whenever they want to spend our money in a way not agreed upon earlier, they have to seek our permission. In theory, at least. If we don’t like what they are doing with (or to) our money, or if we don’t like the way they go about doing it, we can fire them come the next election.

On the other hand, hockey players are employees. That’s the entire difference.

If an employee comes to her or his corporation’s owner and says, Madame or Sir, whatever the case may be, I think I have found a way how to run this business better (more efficiently, whatever), a smart owner would say, pray, sit down. What can I offer you? Tea? Coffee? Tell me more, please. You intrigue me strangely. But imagine that the employee would announce to the entire world that her or his owner is a perfect nincompoop, a nitwit, even, who doesn’t know the first thing about how to run the company, and she or he, the employee, knows much better. The first thing the owner should do is pay her or him more, thus completely changing the cash flow.

What would a smart owner do? Right, fire that employee, and mention the reasons in whatever reference materials a potential future employer asks for.

In a purely market-driven marketplace, there wouldn’t be any revenue sharing with owners whose companies (hockey clubs) are going into the poorhouse. Why, if they can’t run their companies better, if they can’t run them to earn a dollar, they shouldn’t be in business in the first place. Except, these companies are also known as franchises, that is, parts of something bigger. And that bigger thing is the NHL. The NHL takes a longer view, knowing from history, for example, that this or that team was in regular ruins just a few years ago, and it’s printing money left, right, and centre now, just a couple of years later. Besides, it has numerous other reasons, some of them quite legitimate, to try to make sure all of its franchises can survive. Hence: revenue sharing. The richer guys help the poorer guys out. The alleged poverty, of course, is in the eyes of the beholder, but let’s accept it for the sake of argument. Anyhow: have you detected any player participation in all of this?

In theory, of course, when players get a smaller piece of the pie, the league has got more left to share with the poorer relatives. Considering the basic motto of union movements all over the world is “Solidarity,” there’s nothing wrong with that, now, is there?

In any case, it’s owners helping other owners.

The league could have avoided the notion of salary caps altogether, too: at a Board of Governors meeting, behind closed doors, preferably, the owners could have made a solemn promise to one another than none of them was going to spend more than a set amount in player salaries, on pain of harsh penalties, including expulsion.

Of course, can you imagine the cries of collusion? Can you imagine the lawsuits? Can you imagine the NHL asking in defence, and where’s the fairness, pray? Governments can impose minimum wages, and we aren’t allowed to impose their maximums?

Before you get hot around your collars: this was just a supposition.

This lockout is going to cost both sides. The players will never recover salaries missed. The owners face an even more dangerous situation: they may lose more fans than they ever managed to attract. Lost fans don’t only mean lost income in ticket revenue. Having lost fans can also mean (and, undoubtedly, will mean) that some sponsors will decide to spend their money elsewhere. Fewer people to see their names as sponsors around the arena, that makes no sense to them.

There have been studies already that said quite a few sponsors have been reluctant to spend money targeted for so-called discretionary uses on all kinds of luxury boxes and season tickets. These companies have been using this pre-paid access to professional sports events to entertain their business partners. The hope has been that a well-entertained business partner would buy my goods or sell me her or his goods at an acceptable price. After the financial downturn of 2008, many businesses have decided they would save on discretionary spending, thus keeping enough money to keep more of their employees employed.

If this lockout continues, what is the hope they will be running back, their credit cards handy?

Who’s going to lose more? The owners? No. Most of them have other business interests. Owning a professional sports club is just a fulfillment of a childhood dream. The players? Yes. Not all of them can be accommodated by leagues elsewhere. In fact, not all of them even want to be accommodated by leagues elsewhere. Their best-before date is approaching faster than they think, too.

And yet, they prefer to remain engaged in a crazy war that they cannot win. Not unless, that is, they decide to invest their own money in the NHL, or, better still, invest their own money to form a brand new league. Imagine their surprise when some time later their own employees come to them and demand what they themselves had been demanding of their previous owners before killing the goose that kept laying golden eggs as if on a conveyor belt.

]]>http://blogs.edmontonjournal.com/2012/10/13/players-and-owners-fighting-about-who-really-owns-the-nhl-peter-adler-says/feed/1700cultofhockey_blog_banner4davidstaplesedmontonadler_mugThe lights are on, but nobody’s home — NHL formally cancels start of regular seasonhttp://blogs.edmontonjournal.com/2012/10/04/the-lights-are-on-but-nobodys-home-nhl-formally-cancels-start-of-regular-season/
http://blogs.edmontonjournal.com/2012/10/04/the-lights-are-on-but-nobodys-home-nhl-formally-cancels-start-of-regular-season/#commentsThu, 04 Oct 2012 20:25:54 +0000http://blogs.edmontonjournal.com/?p=133413It was a mere formality today when the National Hockey League confirmed it has closed its doors to at least the start of the 2012-13 regular season. Games scheduled for the two-week period October 11-24 were formally cancelled in what …]]>It was a mere formality today when the National Hockey League confirmed it has closed its doors to at least the start of the 2012-13 regular season. Games scheduled for the two-week period October 11-24 were formally cancelled in what seems to have been an announcement via email to major press outlets. 82 games have been expunged, or at best postponed in the unlikely instance of a quick resolution of the dispute.

At this point, a more likely scenario is that 82 games will ultimately be cancelled for each team. Even after seven years of uninterrupted growth, the NHL continues to follow its long-standing policy that hard-line confrontation with the stars of the show takes precedence over reliable delivery of its own product.

For now, six Edmonton Oilers games have been wiped out, including the season opener in Vancouver Oct 13, the home opener against the Stanley Cup champion Kings on the 16th, and what would have been the first instalment of the Battle of Alberta in Edmonton on Oct 24.

In an email to the National Post, NHL deputy commissioner Bill Daly said this outcome is “Extremely disappointing. Certainly, the hope continues to be that we will have a breakthrough at some point and that the rest can fall into place quickly. We will see.”

Predictably, NHL Players’ Association executive director Donald Fehr placed responsibility for the cancellations on the league and its owners, who for the third time in Gary Bettman’s stormy tenure have initiated the lockout. In a formal statement, Fehr commented:

“The decision to cancel the first two weeks of the NHL season is the unilateral choice of the NHL owners. If the owners truly cared about the game and the fans, they would lift the lockout and allow the season to begin on time while negotiations continue. A lockout should be the last resort in bargaining, not the strategy of first resort. For nearly 20 years, the owners have elected to lock out the players in an effort to secure massive concessions. Nevertheless, the players remain committed to playing hockey while the parties work to reach a deal that is fair for both sides. We hope we will soon have a willing negotiating partner.”

Players, especially European stars such as Ilya Kovalchuk, have become increasingly outspoken on the prospect of the NHL permanently losing some of its star players due to its track record of work stoppages and broken promises (a.k.a. “contracts”). Admittedly, the fine print of those pacts contain reference to the Collective Bargaining Agreement — that document which doesn’t currently exist — but they also contain plenty of references to dollar figures which the ownership group is trying to renege on, for the second time in eight years.

It seems to be an impasse with no resolution in sight, even as the situation endangers the very future of the sport.

Meanwhile, television networks advised of alternative plans:

— CBC will fill its Saturday night slot with “Hockey Night in Canada – Your Pick“, in which fans will vote among five choices of historic games to watch at 8 p.m. local time. Ominously, the choices for the first week include five Eastern Conference games with two choices involving the Leafs and Habs and none at all for fans of the Oilers, Flames, Jets, or Canucks. Not a promising start.

— TSN has established a recent practice of rebroadcasting historic international games. No word yet whether they will tap in to ESPN’s package of Kontinental Hockey League games. While those start at inconvenient times in North America, at least there are games being played in that league. Don’t count on there being any in the NHL any time soon.

The dozen or so Oilers’ players who crowded the room at the Alberta Labour Relations Board building Friday morning were the smartest guys amongst all those present. With the …

]]>By PETER ADLER

The Cult of Hockey @ The Edmonton Journal

The dozen or so Oilers’ players who crowded the room at the Alberta Labour Relations Board building Friday morning were the smartest guys amongst all those present. With the weather as beautiful as it was, they left for the lunch break together with all those lawyers and media stiffs shortly after noon. Lawyers and media stiffs came back. The players didn’t.

And, yet, it was their case that was heard. Together with the NHLPA they came up with an interesting way to annoy the NHL. Claiming the league followed Alberta labour laws’ rules for imposing lockouts very loosely, they complained that the league-wide lockout doesn’t apply to Alberta. In practical terms this would mean that the Calgary Flames and the Edmonton Oilers would have to open their facilities for these players, pay them their stipend during what would pretend to be training camps, and once regular season rolls around Oct. 11, pay them to the full extent of their contracts. They didn’t say what they would be paid for. Usually, they collect salaries for playing hockey. Since everybody else is off, one can imagine they would be playing 82 Battles of Alberta.

What’s at issue is this: the NHL, following Alberta law, applied for a mediator in August. The deal is that the mediator hears out both sides, and following a bit of reflection, either offers them a potentially mutually acceptable solution, or withdraws into darkness. Except the league bid the mediator good-bye within a few days, realizing it did what was asked of it under the existing rules, and knowing their quarrel with their union has nothing to do with either of the two Alberta-based teams. Basically, the entire process was a formality, and the league, quite openly, no subterfuge, treated it as such.

And that’s what got the players hot around the collars. Or, to be more precise, that’s what gave their union leaders the idea they could harass the league. Whether they would be successful was quite obviously beside the point, judging by some statements uttered recently by Oilers’ goalie Devan Dubnyk, one of the 21 Oilers and Flames players signed under the petition, and the union’s director of operations, Alexandra Dagg.

There was supposed to be a hearing Sep. 10, but it was cancelled at the last moment. Why? Because the NHL read NHLPA’s correspondence dealing with THAT hearing as saying the issue to be heard had nothing to do with the issue at hand. As we all know, the issue at hand is negotiating a new collective bargaining agreement. The previous one expired Sept. 15, and the league has been on record since last fall as saying it’s going to close shop once this happens, and won’t re-open until a new CBA is in place.

In any case, the league asked the Alberta Labour Relations Board to cancel the original hearing. Its deputy commissioner Bill Daly was close to boarding the plane to Edmonton when informed of the change.

This time he wasn’t so lucky. And so, his plane landed in Edmonton Friday at 1 a.m., and just eight hours later, he appeared in the hearing room.

Peter Gall, appearing for the league, opened by stating the NHL lockout has got nothing to do with Alberta law. The collective bargaining agreement, just expired, says clearly all legal disputes between the parties will be handled using U.S. labour legislation. Yes, the idea of the lockout is to apply economic pressure on the players so they see the light and begin negotiating seriously, based on the league’s proposals, Gall admitted. But, of course, that is nothing new.

The NHL is a joint venture of 30 teams, and it can hardly work otherwise than using a common set of rules. The American labour law is a federal entity, while Canada’s labour laws differ from province to province, and that would make it impossible to operate.

Besides, there’s no collective bargaining relationship between the Flames and Oilers on one side and the NHLPA on the other. Yes, the league has delegated some negotiating to individual teams: they can put together contracts with their players. But even so, there are some limitations imposed by the league (term, amount), and in any case, no matter what contracts teams negotiate with their players, they have to conform to all the basic features of the so-called standard player contract. This jewel of legalese is part of the collective bargaining agreement too.

Daly provided some enlightening commentary while on witness stand questioned by Gall, but the questioning by Robert Blair for the players and the union must have amazed the deputy commissioner beyond belief. Whether he wanted to look and sound like American judge John Sirica of Watergate fame remains to be seen, but questions aimed at finding what Daly knew and when he knew it bordered on the unusual. And so did questions of the kind that gives lawyers bad name. So, Mr. Daly, there are 30 teams in the NHL, 23 of them in the U.S. Does it mean there are seven NHL clubs in Canada? How could Daly answer “Correct” with a straight face, remains one big unknown.

Blair’s take differed wildly from Gall’s approach. No wonder.

On behalf of the NHLPA, Blair insisted you can’t have two sets of rules in one jurisdiction. He went so far as to call the use of the American labour legislation “flag of convenience,” ignoring completely the explanation uttered just a few minutes earlier by his colleague opposite.

So, Blair suggested the board has two options: issue a cease-and-desist order on the NHL, or an order demanding it comply with Alberta laws.

To be fair, Blair raised a number of interesting questions dealing with some very fine points of legal applications, such as the issue of sovereignty.

That about summed up the morning proceedings.

But all that was nothing compared to the afternoon. With no players present, the lawyers went at each other with gusto. Calling one another “my friend,” to boot, and doing it so often, it raised the logical question whether they’d be willing to spend some time together on a deserted island, and whether they’d come out of the ordeal alive. At least one of them.

First, Peter Gall started his summation with a single sentence that really didn’t require much elaboration, and yet, he managed to expand it into a 90-minute oratorical exercise. Hats off.

Yes, he said, the NHL accepts it’s not above the law, it only says it’s not ruled by the Alberta codes. Still, the relationship between individual clubs and their players is not based on collective bargaining, and it’s not the clubs who’s locking out the players.

Robert Blair trumped Gall: his summation lasted about two hours. He based his case on citing what the lawyers call “the authorities,” meaning, they find precedents that match their view of the case, whatever it may be. An experienced lawyer, given time, can make at least two cases based on one single situation, just using a different set of authorities. One approach sends the accused straight to the gallows, the other makes him an Order of Canada candidate.

The most interesting part: while insisting again and again that Alberta laws prevail in the NHLPA’s case against the NHL, all but one of the cases he cited came from other jurisdictions. That, of course, made Blair’s insistence that Alberta can live without U.S. labour legislation, thank you very much, sound a bit hollow.

Gall, in his re-rebuttal, took Blair’s case apart. He didn’t need much more than to say that the NHL doesn’t consider itself to be, and is not, above the law, adding that it’s which law applies that’s at issue. And just to add insult to injury, he added that Canada’s federal employees who live and work in Alberta, unionized all of them, are not covered by the Alberta labour laws.

No wonder that the board with Mark L. Asbell, QC, presiding, and Pam Kirkwood with Bruce Moffatt sharing the bench with him, was so exhausted that by the time the proceedings ended by half-past-seven in the evening, it thanked all those present and announced there’s not going to be any verdict tonight, cheers, and enjoy your weekend.

It’s expected that Bill Daly will knock on his door at home at about 7 a.m. Saturday.

That’s what’s called a hard day’s night.

]]>http://blogs.edmontonjournal.com/2012/09/22/nhlpas-insistence-that-lockout-doesnt-apply-in-alberta-rings-hollow-peter-adler-says/feed/07282406davidstaplesedmonton460cultofhockey_blog_banneradler_mugDaryl Katz speaks out on arena. Full transcript of interview.http://blogs.edmontonjournal.com/2012/09/18/daryl-katz-speaks-out-on-arena-full-transcript-of-interview/
http://blogs.edmontonjournal.com/2012/09/18/daryl-katz-speaks-out-on-arena-full-transcript-of-interview/#commentsTue, 18 Sep 2012 14:40:36 +0000http://blogs.edmontonjournal.com/?p=131955Katz: “None of this would have even come into the public vein, but for the leak.”

Thanks to Journal sports editor Craig Ellingson for working late on this, a full transcript of the interview between Oilers owner Daryl Katz, my …

]]>Katz: “None of this would have even come into the public vein, but for the leak.”

Thanks to Journal sports editor Craig Ellingson for working late on this, a full transcript of the interview between Oilers owner Daryl Katz, my Journal colleague John MacKinnon, and myself. That is dedication, Craig, and it’s much appreciated, as I believe the full transcript is worth reading, as it’s the first time that Katz has ever talked in detail, in public, about this arena deal.

We had an hour to talk to Katz and covered a lot of ground on the arena file. It was good to hear is take, essential, actually, because the secrecy around this deal is killing it.

The iron law of information is that in the absence of good information, bad information flourishes — and that’s what we were seeing here, with all kinds of wild speculation on the deal, on Katz, on his motivations and machinations.

This deal has got to be fought out in public now. The sooner, the better we all need to hear and read full details of what the Katz Group is asking and what the saying is saying in return.

In this interview, you will see that Katz often say he can’t refer to details of the negotiation because both sides agreed the deal-making will be done in private. But both sides can agree to end that and get the details out in public. It’s high time that happened, because the strongest supporters of the arena on council are now feeling surprised by the Katz group’s ask. It’s hard to know how exactly thing went off the rails, but it’s clear there’s been a failure to communicate here. If the public is ever going to fully buy into this project, though, they’ve got to know exactly what they’re being asked to support and why they should do so. Otherwise this thing is going nowhere, if it’s not already taken a fatal blow.

Here, then, is the interview, where Katz starts off by giving a statement, then we ask questions.

Daryl Katz: I want to thank you for taking the time to talk to me. It’s not often I talk. I wanted to now because I think there is a lot at stake. And people in Edmonton need to understand the full picture. First thing, I’d like to clear the air on this issue of an operating subsidy. Because what’s come out of the city over the past several days, to be frank, is unfair, untrue and totally counterproductive if what we’re trying to do is secure the Oilers’ future in Edmonton and have us participate in the development of a new arena and sports entertainment district so we can do things like improve the quality of life downtown at expand the city’s tax base. The fact is that this deal has always contemplated a mechanism to offset capital and operating costs, just as other small markets have done. In the famous New York City framework, that mechanism was a casino-and-gaming mechanism that the city agreed to help facilitate. Now, you’d have to ask the city what they’ve done in that regard, but it didn’t materialize, and when it didn’t happen, we started looking for an alternative mechanism, but it is absolutely not a new concept. It has always been there, and to suggest that I’ve tried to change the deal at the last minute is untrue. The fact is that I’m trying to save the deal by finding a way to make the economics work for both sides. Obviously, to have those efforts turned against me is really unfortunate. Having a mechanism to offset capital costs is a key element of the deals in Winnipeg and Pittsburgh. These have been our models in our discussions with administration from the outset, and we’ve been talking to the mayor and the administration about this for month. I feel badly in members of council were caught off guard, but I guess that is politics and that’s not actually our responsibility.

Here is what I’d really like you take away from this discussion: this is the case for public investment insofar as Edmonton is involved in this deal. Number one, Edmonton’s needs a new arena. Edmonton needs a new arena with the Oilers and our investment, or without. With the Oilers and our investment, the cost of the arena is shared. Without the Oilers, Edmonton still needs a new arena, but the public would have to pay the full freight, just as it would have to pay $250-odd million to refurbish Rexall Place. Plus it would have to pay all the capital and operating costs, just like Quebec City will, just like Kansas City, just like Phoenix, just like Seattle, just like Hamilton, and just like other cities that would all like an NHL or NBA team to subsidize their arenas. So you see, in our view, it is the team that acts as a subsidy for a city’s arena, which is effectively infrastructure, not the other way around. So the Oilers are the key to the arena, and the arena, in turn, is the key to a whole host of benefits to the city and the public. It will sustain the Oilers and the National Hockey League in Edmonton for 35 years. It will drive the revitalization of downtown. It will generate billions of new investment downtown. It will enrich life and the social, cultural and economic fabric of the city. And it will also drive the CRL (the Community Revitalization Levy, a pool of new property taxes from new business in the downtown over a 20-year period). Now, the CRL is a critical element of this deal, and it’s unique to Edmonton, but people don’t understand it because, frankly, I think the city has downplayed it. The city has conservatively estimated the CRL can generate $1.2- to 1.6-billion for the city. We actually have reason to believe its current internal estimates are in excess of $2 billion.

Now, this CRL is an annuity for the city. It’s a multi-billion-dollar fund that can be used to fund the costs of the arena, plus a host of important civic projects for decades to come. And the arena is the catalyst project for the CRL. Now, you don’t have to take my word for it. The DBA (Downtown Business Association), the Chamber, even the city has said it themselves. As a result, some would argue the CRL should pay for the entire cost of the arena, but at this point, only $45 million has been directed to the arena. Now, in addition to that, the CRL has very little risk, especially because we’ve already invested $70 million towards what could be a multi-billion-dollar private sector development downtown, and that’s just our piece.

But make no mistake, the Oilers are the key. They make the arena possible, and the arena drives the CRL and everything else follows. So that is the point.

This deal meets the city’s need for a new arena, and provides a host of additional and significant benefits, but none of it can happen if the Oilers aren’t sustainable and in Edmonton for the long term. That’s why we feel it’s right and it’s appropriate and it’s even smart for the city to partner with us to invest in this new arena, just as Winnipeg did with the Jets, and just as Pittsburgh did with the Penguins. That’s, frankly, why Edmonton, like very small markets, has to decide if it wants to be a major league city. At some point, all small markets need to decide if they want professional sports franchises. If they do, they need to develop viable P3 models to attract and retain pro sports franchises. You know, that’s especially the case for Edmonton, which is one of the smallest pro sports markets in North America. That’s the case. That’s the key takeaway here.

The other thing we have to realize, I think it’s important, is that it’s not particularly productive to discuss or debate the specific individual elements of the funding framework. What matters, as Mayor Mandel has said, is that the whole package works, and the whole package here is a) the opportunity here to sustain the Oilers and then, through the Oilers, to turn Edmonton’s downtown into a magnet for new people and new investment, and b) to expand Edmonton’s taxbase by billions of dollars for the benefit of the entire city.

It’s clear we’re willing to partner with the city to meet this need to try to capitalize on the opportunity, but we can only do so on terms that are fair and make sense for both sides. That means for us we need a deal that is commensurate with other small markets, even though Edmonton is one of the smallest of small markets, and even though the city of Edmonton gets way more upside through downtown revitalization and the CRL than you would normally find in other markets.

I think the other point to make is the deal presents little risk for the city because the city needs a new arena anyways. For our part, on the other hand, we’re taking a lot of risk by committing to one of the NHL’s smallest markets for 35 years, which by its nature, (is) a relatively small reward on the hockey side (but) a bigger reward on the real estate side, however, that carries with it its own risks and uncertainties. So, fundamentally, all we want is a model that will sustain the team for the long term and is on par with other small markets and what they’ve done to sustain their teams.

But, you know guys, notwithstanding everything, all the hurdles, we’ve never been more excited about the potential for Edmonton to have this world-class arena at the heart of a world-class sports and entertainment district in the heart of a great city. We know that everyone loves the design. It would be an incredible signature landmark for the city and not just because the building is a good-looking building, (but) because we’ve listened to the public. It’s sensitive to an urban landscape and everything else that can be done around it by us and others. Aside from that, let’s face it, we’ve obviously just as excited about our team. We really feel this whole project is far too important to fail. We’re confident we can get a deal done if the city will work with us creatively and constructively towards a solution that works for both parties.”

David Staples: As part of the New York agreement, the city agreed to approach the province about this casino issue you are asking about, seeing if they can help you out in some way with the casino. So my understanding is they’ve made this approach to the province. What exactly do you want in terms of a casino? What kind of revenue would it generate, what kind of split would you get, and have you approached the province yourself about this matter because it’s their decision, not the city’s, as you know.

DK: David, look, I’m not going to get into the specifics or comment on what’s been reported. We committed not to negotiate this deal in public and we’re going to keep our commitment. But I can tell you that the incremental costs when compared to the incremental revenue in this deal are not enough for us to justify a 35-year commitment in one of the league’s smallest markets. We don’t care if it’s a casino or a gaming initiative or something else. We need a mechanism to offset capital and operating costs just like Pittsburgh and Winnipeg. Casino and gaming is just one way and it happens to be used in other markets all over North America. That’s why it was part of the initial framework because it’s used in other parts of North America. That’s neither really here nor there, whether it’s casino gaming or something else. Pittsburgh has a complete reversion of their ticket tax to the team. They’ve used that in a way to subsidize operating costs. Winnipeg has all kinds of subsidies from business subsidies to property tax subsidies to gaming subsidies to a whole whack of things, so we’re not set on casino gaming. It was merely a mechanism in the initial framework that everybody knew had to be delivered in one context or another to make the funding model and the framework work

DS: How would you say in terms of the city’s take-up of this issue on the casino, or on this particular issue, (city councilors) (Kim) Krushell’s saying she’s surprised at the Katz Group’s new demands, Bryan Anderson saying he’s taken aback. In terms of their take-up of your issue here on the casino money, how would you characterize what you’re thinking about the negotiations and where it’s at and what’s your state of mind?

DK: Well, David, the New York City framework was clear on a number of things, OK? Nobody should be surprised, in our view, and as I said in my initial statement, this is not a new thing. This goes back a long time. Why the councilors were surprised – the mayor and the administration certainly shouldn’t be because the framework goes back a long time and the New York meeting was almost a year ago – I can tell you, though, the New York framework was very clear on a shared vision for a new arena that enriches Edmonton, revitalizes downtown and serves as a catalyst for this billion-dollar CRL, and it was very clear that a condition of the deal had to be to ensure the Oilers’ sustainability long term. Now, the vision stands, but based on everything we know, subsequent to the New York framework, some things have changed. The costs of the arena and the winter garden are higher. Based on the design of the building, revenues will be lower, costs will be more than expected. The casino that was contemplated in the framework to act as a mechanism to help offset operating costs hasn’t happened, so that’s a change — merely one way to skin the cat. We have a better understanding now of things like taxes and what’s been done in other markets. We also have a better understanding, to be frank, that the CRL is going to be double in value relative to what it was supposed to be. So we have things that have changed, but I can tell you one thing that has not changed is the recognition in the initial framework that we require this mechanism to offset capital and offset operating costs, and casino or gaming – Winnipeg does it by casino/gaming, Pittsburgh does it I think by casino – was penciled in as the way to facilitate that. Relative to what the city has done with the province – you’ll have to ask them – we’ve been told by the city from the offset relative to this and other matters dealing with the province to let them deal with it.

DS: So you haven’t approached the province yourself?

DK: Our people have had discussions, but I don’t know precisely the specifics. As with everything having to do with the province, these things are kind of bigger picture arrangements between the province and the city.

DS: You brought up the Winnipeg deal a few times. Mayor Mandel might say you can’t cherry-pick good things from the Winnipeg deal because, he would point out, the Winnipeg arena was built from the start largely with private money – yes, going forward, there are these subsidies in various tax concessions and also some lottery money – but at the start, there was far, far more private money going in than we see in Edmonton. So, in total, he’s characterizing the Edmonton deal as a very generous offer from the city to an NHL team – that’s what he said on the radio last week. What would you say to his position?

DK: Well, relative to Winnipeg, the MTS Centre was built in 2004 for $144 million. It’s a different day, it’s a different time, it’s a different project, and costs are different. Of that amount, I think $54 million came from various orders of the government. But the one big difference, David, is the arena is 100 per cent privately owned. In Edmonton, the city way back insisted on owning the arena. Now, I might feel differently if I owned the arena, but I don’t. The city is going to and they want to. Winnipeg’s entire subsidy, operating capital – irrespective of the original capital costs, which was 10 years ago – is over $12.5 million a year. Now Pittsburgh, which is maybe a more direct comparison because it’s a newer facility, was built in 2008 for about $320 million, probably consistent with our price today adjusted for inflation. The team made no upfront capital investment, they paid a rental number — $5 million a year – they pay no property tax, they have complete reversion of the ticket tax, and they have a cap on capital maintenance. And you know what? That market is three times the size of the Edmonton market. Three times.

DS: I want to ask you about the CRL. New property taxes from this new development around the arena if it’s built will be gathered in a downtown community revitalization levy, which the city estimates will raise conservatively $1 billion in new property taxes over 20 years. So $45 million of that as you said is slated to go to pay for the new arena. Is that the right amount? If not, why not, and how much should it be?

DK: Well, David, you know, our position is this deal has to be a win-win for everyone, and you have to look at all of these things, what’s reasonable in the context of the deal. And the CRL, you’re quite correct, is something that is unique to the Edmonton structure. For instance, they didn’t have that in Pittsburgh. Pittsburgh did not get an enormous annuity and windfall when they cut the deal with the Penguins. Our initial belief was the revenues from the CRL could finance the whole cost of the arena because, at the time, it was worth $1.2 billion. The city then said it wasn’t possible, even though $1.2 billion seems like a lot of money. They decided, for whatever reason – I don’t know why – that they’d only commit $45 million to the arena. That’s how we wound up with the ticket tax, because they wouldn’t commit more than $45 million from the CRL. Now we know that the current estimates are as much as $2.5 billion for the CRL. That’s something you really should ask the city because we’ve been trying to find out the right numbers and ask for the internal reports many times and we haven’t got them. What I can tell you, though, is that the windfall of the CRL, if it comes, will all be because the Katz Group and the Oilers are there to underpin the arena development, which brings us full circle back to the need for the Oilers to be sustainable for the long term.

DS: So how much of the CRL should go now, would you say .. What should we get from the CRL for the arena?

DK: I’m not going to negotiate in public. I’ve suggested that already, and I can tell you you need to look at the facts and make some decisions. The CRL is a goldmine for the city. The Oilers are the anchor for the arena and the arena is the catalyst for the CRL. Some would argue it should pay for the whole arena. We’re not asking for that, David, OK? We’re willing to partner with the city to meet the needs of everyone and capitalize on the opportunity. All we’re asking for is a deal that’s fair and makes sense for both parties and that is commensurate with other small markets – i.e. Winnipeg and Pittsburgh – even though the City of Edmonton gets way more upside through revitalization and the CRL.

John MacKinnon: Daryl, it’s John MacKinnon here. Just taking a bit of a different tack – and you’ve talked earlier in your own remarks of the timing of you coming publicly in this fashion — as we talked about earlier as well, it coincides obviously with the onset of an NHL lockout, which was preceded by really a lot of spending on the part of owners around the league – not necessarily you guys, but certainly Minnesota spending like $100 million each basically for Parise and Suter and so forth. Is there a mixed message here — the perception maybe from the public that the deal here may be changing or there’s a new or different ask coming to the public at a time when the league itself is in fact in lockout? Is that an unfortunate juxtaposition?

DK: John, as I said to you, the ask for a mechanism to offset capital costs has been in the framework from the beginning. I have no idea why it’s such a surprise to members of council. Relative to the lockout – lookit, the only people that can talk about the lockout are Gary Bettman and Bill Daly, but I will answer your question on timing and why now, OK John? If we don’t move quickly, this deal’s done. Time is our enemy. This thing’s been going on for four and a half years. Our lease expires in less than 24 months. Costs are mounting every day on the design process. Construction-cost inflation in Alberta is a fact of life. The longer it takes, the more it will cost. Even if we were to stop the design process now, we’re looking at an additional $25 million in costs just from the design fees and construction-cost inflation in Alberta. At some point – and that point’s soon – the costs will become prohibitive for everyone and there’ll be no project. That’s why time and delays are our enemy right now.

JM: You mention earlier – and again, just referring to this apparent disconnect from your point of view, these components of the formula have been there all along – but for whatever reason this has occurred, you have seemingly some councillors, at any rate, who were – I don’t think they were pretending to be surprised or somewhat taken aback – obviously, to facilitate, to move this forward, the relationship between you and that council has to be I think sorted out, at this point. And you indicate it’s really not your business. But pragmatically, how do we get to that at this point.

DK: Well, John, my team … if you want to look at our track record and judge the quality of our commitments and what we’ve done from the outset, we — Katz Group — have made our investments of time and money in absolute good faith and without regret. We do remain confident we can make this work if the city will work with us creatively and constructively. We continue to do that today with the administration. Just to put things in context, John, I think this is really important that we look at how we really got here, all right? Because people forget. I bought the Oilers because EIG (Edmonton Investors Group) was fractured and Edmonton’s ability to keep the team was at risk, OK? Nobody can doubt that. That was only four years ago. EIG knew and I knew that the key to Oilers’ sustainability was a new model and a new arena. I stepped up. Nobody else would, John, OK? I stepped up with two goals: to insure the Oilers’ long-term sustainability in Edmonton and to turn Edmonton’s need for a new arena into something unbelievable for the city. I’ve been at this five years, OK? I spent $200 million on the team, I’ve funded operating losses since, I’ve put $70 million into acquiring land. Nobody can question my good faith or my commitment. We’ve made enormous progress over the last five years that even relevant to this arena, we know what the public wants in terms of the design. We know what it’ll cost. We now know what the CRL will generate. We are determined to find a deal that works. We feel we’re close to realizing the opportunity, but only it achieves the fundamental goal of ensuring that the Oilers and the NHL are sustainable in one of the league’s smallest markets for the long term. The city has little risk, John, and every deal has to look at risk reward. So the city has little risk but they have enormous reward, because it needs a new arena that it otherwise would have to pay for by itself, and without us – so what do they get? They get a 35-year deal for the NHL in Edmonton; they get a subsidized arena because the NHL team is there to play in one of the league’s smallest markets; they get a revitalized downtown, that new downtown will drive a $2 billion-plus CRL annuity; Katz Group, for our part, we make a 35-year commitment to the NHL’s some would say smallest market, and we get a cost sharing of some elements but nothing yet that’s commensurate with Winnipeg, even Pittsburgh, which is three times the size of the Edmonton market. And neither Winnipeg nor Pittsburgh has the upside of the CRL to offset the investment they’re making to keep their pro sports franchise in the city. You look at the risk reward – in your mind, is that deal disproportionate?

JM: Well, in the overall …

DK: It’s a rhetorical question. You know what I mean?

JM: I do. You mentioned that – and this is clear and we’ve seen this happening over time and there’s been a lot of frustration and a lot of stakeholders hear about time passing and time passing and costs increasing and inflationary factors kicking into gear — and you mention if something isn’t achieved soon, what does that mean? What is the timeframe, in your mind? What is sort of the drop-dead date?

DK: Well, I think it comes down to construction costs. We were ready to go years ago. I don’t know the numbers, but I think in the last year – Bob (Black, Katz Group executive vice-president)’s got the numbers through Alberta Infrastructure – prices are up significantly in the last couple of years, let alone when the mayor’s leadership report four years ago said we should build a $450-million arena. A $450-million arena four years ago, I can tell you, sure isn’t a $450-million today. And if we wait because of the boom going on in Alberta, I’m very concerned this deal’s going to price itself out of the market. So when I say ready to go, we’d like to be able to agree on a deal within the next month or two, and we’d like to be able to break ground on the project in the spring and get had pricing late fall, or else costs could be up another 10 per cent, John. I mean, this thing has been dragging. Quebec City is in the ground before us and they started, like, three years after us. You know what I mean? It’s something like that.

DS: Daryl, this is David again. Your lease is up in 2014 and kind of the implication of what you’re saying is if the city is going to do this on their own without the Oilers, it’s going to cost them a lot of money, so is the implication of that that one of the options is moving the team or selling the team to another location. Is that a possibility?

DK: No, I was merely making the point, David, that other cities all around North America – from Quebec City to Kansas City to Seattle to Hamilton – build arenas on their own even if they don’t have an NHL or NBA team. Why? Because big cities need arenas, because they’re multi-purpose sports and entertainment venues. They are tantamount to infrastructure. For those cities who are fortunate enough to attract an NBA or an NHL team, those teams act as a subsidy for the city because they would otherwise be left with having to pay all the costs themselves. Kansas City is a perfect example. Brand-new arena, no NBA team, no NHL team. So, I’m saying Edmonton has to build one anyway. Why? Because our arena now was built in 1972 and is falling apart. So as a major-league city, you need a public sports and entertainment multipurpose venue. I was making a comparison to cities who have done this and continue to search for NBA and NHL teams. Relative to moving the team, I’m focused on making this deal work. God knows I’ve spent enough money. My wife thinks I’m nuts, OK? Guys, don’t laugh. I’m tellin’ ya, she thinks I’m nuts. If this doesn’t work, what can I say? Obviously, all bets are off, and we’ll have to figure out what comes next. And I don’t know what that will be, OK? That’s truthful. But I’m focused on making this work. And I’m continuing to spend a pile of money. And we just want a deal that’s commensurate with the other small markets even though the City of Edmonton is going to walk away with a $2-billion CRL that these other cities did not have.

DS: You called Edmonton, when you were first talking to us here, the smallest of small markets. My understanding, though, it’s more like a market right now in the range of the No. 10 market in the NHL, in there, and that you pay into revenue sharing in the NHL. So it’s not, right now, a small market. Some people would say it’s not a small market and that means that the Oilers are in a position to build the arena largely privately. So what would you say first to the size of the Edmonton market right now, the size of the Edmonton market going forward, and this notion you should be doing more to build this privately as we saw Toronto, Ottawa, Vancouver.

DK: Well, No. 1, I can tell you the way we look at the markets. Markets are determined by the size of their media market. The size of the media market determines TV revenue, advertising and sponsorship revenue. Edmonton and Winnipeg are tied for the smallest markets in the league. That significantly affects revenue and the ability to grow. So I don’t know where you’re getting your numbers, but we in the league don’t look at it that way.

DS: Well, from ticket revenues would be the …

DK: Ticket revenues are not relevant. Everybody should sell out if they win, if they have a winning team. Further, ticket revenues – the way the NHL looks at it – have foreign-exchange risk. So in our view, if you have a winning team, everybody should sell out, that’s just the way it is, but what some markets have that others don’t are enormous media markets, and that drives an enormous part of a team’s revenue. So when I say Pittsburgh, who on paper – I described their deal – is three times the size of Edmonton, Dave, that’s the size of their media market that controls television, advertising, sponsorship and the like, OK? That’s the big variable.

DS: Does not Edmonton, though, have a larger base of people who are willing to pay top dollar for NHL tickets and does that not also something (that’s used for) a formulation of how big the market is?

DK: No, it doesn’t. Edmonton could be viewed as a very loyal hockey market but you have to also understand we have the lowest corporate season-ticket base in the National Hockey League. We have more of an individual season-ticket base when you look at every other team in the league. That’s something that’s a challenge for the Oilers. To be frank, that’s something that the Calgary Flames, for instance, don’t have. They have a very big corporate base. Relative to your question to the need for public money to sustain the NHL or professional sports, let’s be frank, the only privately funded NHL arena that hasn’t been a financial disaster is ACC (Air Canada Centre) in Toronto, where they have the Leafs and an NBA franchise. Everyone else lost their shirts. Dave, you know that. They lost their buildings and their teams, right?

DS: Correct.

DK: So this has to be a private-public partnership. I don’t think anybody denies that. Now, Edmonton is a great hockey town, not necessarily a great hockey market. We have the best and the most knowledgeable and, to be honest, loyal fans in the NHL. That’s what we believe. But Edmonton is tied for the smallest media market in the league by far, and we have the lowest percentage of corporate season-ticket holders. And in already a small market, you guys, we have to compete with a taxpayer-subsidized facility currently being renovated at public expense to better compete with us. You know who that is?

JM: It’s Northlands.

DS: I’m assuming that is a rhetorical question.

DK: The reality is we need a new arena. The city needs one. The arena doesn’t generate enough for us to build it ourselves, especially if we’re not going to own it, that it has huge benefits to the city that warrant public investment. No. 1, it locks up the Oilers and the NHL for 35 years, and that’s pretty important; (No. 2,) You gain an iconic landmark that can transform the city’s identity; (No. 3) Enormous, expanded tax base, including multi-billion-dollar CRL; (No. 4) Major catalyst for much-needed revitalization of our downtown core; (No. 5) Billions of new investment downtown; (No. 6) New sports-and-entertainment district; (No. 7) Stronger draw for people to work, live and play downtown, which helps all our employers. The city has been focused on the downside risks of the project, which is appropriate, but they also have to look at the benefits. We have to think about the city’s future and design a future boldly and with some confidence, OK? We need a P3 that can sustain the Oilers that is commensurate with other small markets. That’s what we need. That’s all we’re asking for, and we’re willing to partner with the city to meet this need and capitalize on this opportunity. But we can only do so on terms that are fair and make sense for both parties.

DS: Councillor Don Iveson said this past week he heard talk that, with all these what he characterizes as new demands, that the talk is the Oilers are trying to scuttle the deal so they can get a better deal elsewhere. This is some of the chit-chat, gossip that is going around city hall that he’s hearing and relaying. What do you say to this concern?

DK: Well, so he’s questioning my track record and good faith. I just went over with you guys how much I’ve spent and what I’ve committed to this project. He’s suggesting he doesn’t believe me. That’s ridiculous. If you want to judge the quality of my commitments, guys, look at what we said we would do with the hockey team four years ago and what we’ve done since, and we’re just getting started. The Oilers are the talk of the National Hockey League, just like Edmonton can be the talk of North America if we get this deal done. We’ve made every investment of time and money in good faith and without regret, and I’m confident we can make this work if the city will work with us creatively and constructively towards a solution that works for both parties. I didn’t hear what Don Iveson said, but how is that productive?

JM: It’s John again here, Daryl. I always find it interesting, the whole discussion – you’re clearly very impassioned – this is something I know you believe in very strongly and have thought through with great detail but also with the sense of doing something grand for the city you’ve been part of for a long, long time, and I’m grateful, so is David, for this opportunity, but would it have been more appropriate for you to make this impassioned discussion to city council — you had the opportunity and declined it – or in a larger public forum?

DK: Well, you know, John, that’s what the mayor and the administration should be doing. I think we’ve added up, John, all the money this deal will cost us if we do it. I think it’s between $500- and $700-million. Now you know why my wife thinks I’m nuts.

DS: What did she say to you, exactly?

DK: I can’t repeat what she actually said to me (chuckles). We didn’t go to the last council meeting because we are in negotiations with administration and the mayor and administration suggested we shouldn’t go if a lot of the issues weren’t resolved and there’s still a lot of outstanding issues. At the appropriate time, we will go to city council. You guys forget I made my impassioned pitch over two years ago, July 20 or whatever.

JM: 21

DK: Over two years ago, guys, and where are we? We’re still banging our heads against the wall. Like I said, Quebec City already broke ground. So we’re either going to do this deal or just the lapse of time is going to preclude us from doing it. But nobody can question our commitment or that we’ve made our investment of time and money in good faith and, you know, my guys talk to the administration daily. None of this would have even come into the public vein, David, but for the leak, which we’re still trying to find out where it came from. Because we were in the midst of negotiating and trying to finalize things with the city based on the initial framework that did include a casino mechanism, and if it didn’t work out, it didn’t work out, but when two parties are trying to make a deal, it’s just not sufficient for one to say ‘too bad, so sad, you guys eat it.’ That’s not how two sides make a reasonable deal. You work together and find alternatives. I was surprised that councillors were surprised because they should not have been. They should have been, I would imagine, briefed and had copies of the framework and been kept up to speed, but to have my integrity and commitment questioned, and to suggest this is new and came out of nowhere just is not true and not fair.

JM: Last October, the New York meeting at NHL headquarters, for a time anyway, seemed to have facilitated something concrete. There was a framework that came out of that, there seemed to be some positive momentum, and obviously Gary Bettman’s involvement was central to that process. Is there an opportunity or some occasion where another intervention by Bettman would help or is that actually a part of the process in an ongoing way?

DK: I don’t think so. We came out of the New York meeting, we had our list, we had our framework, John. We were supposed to have the deal signed, sealed and delivered by the end of the year. It’s over a year later, we’re not even close. I’ve been working on this, John, for four-and-a-half years. I’m probably in it for $300 million, including the team. I understand everyone’s frustrated, but not everyone’s spent $300 million. To consider our track record and what we’ve done from the outset, when the team was on the ropes and at risk four years ago, and what we’ve spent to get it to this point and all the good things we’re trying to do. What happened the last couple weeks just isn’t even fair. You know, John, some guys just wouldn’t put up with it.

DS: How close are you to throwing it in, Daryl? This is David here.

DK: Lookit, I’m focused, David, on trying to make this deal work. I have a lot of advisors and friends. I say in jest they tell me I’m nuts but why would you put yourself through this?

DS: What do you tell them?

DK: Lookit, everything that’s worth doing is worth making sacrifices for. Nothing is easy to get done. There’s no deal, no transaction that’s easy to get done. This has been maybe more trying, but I think we are close to realizing our vision with the city and I think if we work together and are reasonable, we could do so. So, I’m committed to trying to make this happen, but you ask one of the reasons I’m talking to you guys is because of timing and delay. We have to move quickly. Time is our enemy. The longer it takes, the more it will cost, and costs will make it more prohibitive for all of us. So it’s crunch time, and that’s why I’m talking to you.

DS: How important is the office tower project and what would you like to see from the city in that regards?

DK: Well, Dave, I think I’ve said three times I’m not going to get into negotiating in public, because I committed to the city I wouldn’t do that. So that’s why we don’t leak stuff and we don’t negotiate in public, OK? But that is a very good question and I’m glad you asked it, because this is where you really see how the whole package has to work for everyone. And to Steve Mandel’s credit, he has always said this isn’t a line-item exercise, you can’t cherry pick, we need an overall package that works for both parties and realizes the full potential for the City of Edmonton. OK? So relative to the office building, the public had great insight relative to design. On the arena, through our focus groups, they said it had to work on all four sides – there could be no back door. They didn’t want to see loading docks and all that stuff. You can understand why. So the solution was to shroud the loading bays with a commercial building that we would build as part of the private-sector development around the arena. To make economics work, we need the critical mass, obviously, of an office tower. And guess what? The city actually needs office space that could save, by their report, taxpayers money by centralizing all their office space. So what we’re saying to the city is if they went to an RFP, we would compete for it, and if we won, then together with the arena we’d have a critical mass to build a hotel and related projects. Now, all those things working together would supercharge the CRL and drive it forward faster for the city to realize its billions of dollars in tax revenue. Without office space, it might not be possible to achieve the current design. Now, to be clear, we need an anchor tenant. It doesn’t have to be the city. It could be others, but it seemed like an obvious answer for us if mutual interests and opportunity because the city needs and was looking for office space, so that was the genesis of that, Dave.

DS: So what do you need from the city in order to proceed on that in terms of …

DK: I’m not going to get into what we need and what we don’t need. The city has a process. I imagine they’re going to go through an RFP. That’s a public process and we’ll respond. That’s what it comes down to.

–Announcement that hour mark reached for interview —

DK: If you guys have a few questions, I don’t mind. I don’t mind talking to you. You guys, what I don’t want you to do is lose the key message here, that this is an enormous opportunity, that none of it can happen without the Oilers’ sustainability, and we need to agree on a whole package that makes sense for everyone having regard to risk-reward and win-win and all this other stuff.

DS: How about one more question each for John and I, and I’ll start, if that’s OK. And I wanted to correct one thing, Daryl. I believe that the 2008 mayor’s task force envisioned a $00-million arena, and I could be wrong about that – not $450 million at that time – but that’s my understanding.

(It was $450 million not including land)

DS: OK, well that’s in the records and perhaps I’m wrong. So, my question is this: The New York framework for the deal saw you move from, envisions you moving you from $1 a year rent in your deal to $567 million per year for your lease to go to the mortgage. Instead of getting $4.5 million in ticket tax, that money would go to the arena’s mortgage at $7 million per year. Instead of paying $1.2 million for operations each year, you would pay around $10 million a year for operations and maintenance. Is that what you agreed to then, and if so, why? And what does it mean to the Katz Group to have that kind of change to the bottom line on the arena operations?

DK: David, this is the fifth time I’ve told you, I’m not going to get into the details in public because we promised that we wouldn’t. But I can tell you that the incremental costs of this deal, when compared to the incremental revenue, are not enough to justify a 35-year commitment in one of the league’s smallest markets. It doesn’t work. You can look at the Pittsburgh deal or the Winnipeg deal as a commensurate deal. We need a deal that is fair and enables the Oilers to be sustainable for the long term. We’re here to try, over the next several months, to try to finalize a deal and bring it to conclusion.

JM: Daryl, just one last thing from me. You’ve talked a great deal, echoing the mayor, that this is a sort of a gestalt, this is an entire project, and if you start to strip it down to component parts, not only do you get off track, you don’t get what’s going on, do you think through all this process that the citizens – the average Edmontonian – understands what this would bring to their city? And if they don’t, how would you impress upon them that this is in fact the large, kind of transformational project that you believe it to be?

DK: Well, John, that’s an excellent question. That’s what we hope you guys will get out of this interview, is the big-picture stuff. The mayor has been very astute in saying that this isn’t a line-item exercise. You can’t cherry pick, Dave, each of these elements and look at them in obscurity. The mayor said we need an overall package that works for both sides. The whole package is the opportunity, and that is to sustain the Oilers and the National Hockey League for 35 years, to turn Edmonton’s downtown into a magnet for people and new investment, and to expand the city’s tax base by $2 billion to fund a whole host of other important civic initiatives. I hope that sums it up.

Guerrilla warfare at its best. Or worst. Depends on your point of view.

So, a scant few days ago, the NHLPA agrees with the NHL that seeking an Alberta …

]]>By PETER ADLER

The Cult of Hockey @ The Edmonton Journal

Guerrilla warfare at its best. Or worst. Depends on your point of view.

So, a scant few days ago, the NHLPA agrees with the NHL that seeking an Alberta Labour Relations Board injunction against the lockout that is as forthcoming as certainly as the autumn breezes and rains makes no sense.

Alberta law requires that an employer considering imposing a lockout first get a mediator appointed. Said mediator would chat with both sides, in an attempt to find a way out. Once said mediator establishes there is no way out, or she or he just can’t find one, she or he takes a bow.

The NHL did ask for a mediator in August but, within three days, bid that nice person good-bye.

The NHLPA at the time cried foul: how could the union present its case within three days? The league engaged in a mere formality and window-dressing, the union complained.

The league, through its deputy commissioner Bill Daly, agreed with the gist of the grievance: “Just going through all filing technicalities under Alberta law to ensure that to the extent we have to implement a League-wide lockout that we can lawfully do so. Exact same steps as were taken in 2004 and 1994. We view the process as pure formality, not substantive.”

So, there was to be a hearing. The NHLPA would agree the entire quarrel had nothing to do with the issue at hand, namely a lockout by the NHL. After all, it’s not as if the Calgary Flames or Edmonton Oilers were locking out their players.

So, why do 21 Flames and Oilers players all of a sudden decide that the complaint might have merit, after all, and file it again?

Oilers’ goalie Devan Dubnyk explained the idea was pressure the NHL so it drops its decision to stage a lockout while the two sides continue to negotiate.

Alexandra Dagg, the NHLPA’s director of operations, was even more direct and forthcoming. Here’s the Canadian Press quote: “What we’re trying to ensure is that the NHL can’t just continue o ram a lockout down the players (throats) across Canada and the United States.”

What is this called? Guerrilla war, that’s what.

Does it make sense?

No.

Especially after reading a Quebec Labour Board decision to dismiss an NHLPA injunction request, filed by a group of Montreal Canadiens’ players. NHLPA is not registered as a union in Quebec, that complaint went, so, the NHL can’t impose a lockout against its Quebec-based employees.

The union lost. They are not being locked out by a Quebec corporation (the Montreal Canadiens), they are being locked by an employer based elsewhere (the NHL). The Quebec agency said it might re-hear the case again some time in the future, but smart money would bet they would do it only if they wanted to get some complimentary game tickets from the Canadiens players once the lockout is over.

Here’s what Daly had to say after the Quebec ruling had come down: “We are hopeful this ruling will cause the Players’ Association to cease pursing these needless distractions and instead focus all of its efforts and energies on making progress at the bargaining table.”

Well, the 21 Flames and Oilers players have obviously never thought of putting two and two together.

Were they to win, they would be going to work every day, getting paid as of Oct. 11, for not doing the job they’re being paid to perform all the while. See, they are paid to play the games.

Here’s some fatherly advice: if things go by the book, the players will lose. Again. What this entire effort amounts to is a waste of time, energy and sundry resources. On noise. What should the players do?

There won’t be any hearings before the Alberta Labour Relations Board to find out whether the NHL acted unlawfully in its current dispute with its players’ association, NHLPA.

Why …

]]>By PETER ADLER

The Cult of Hockey @ The Edmonton Journal

There won’t be any hearings before the Alberta Labour Relations Board to find out whether the NHL acted unlawfully in its current dispute with its players’ association, NHLPA.

Why not?

The NHLPA came to its senses, agreeing at the last possible minute that the entire matter had nothing to do with its negotiations for a new collective bargaining agreement.

Here’s what happened: according to Alberta’s labour laws, if an employer wishes to lock out her or his employees, the employer has to ask for a mediator to be appointed. This person then has to hear both sides crying on her or his shoulder. Following the hearings, the mediator is expected to either propose a resolution or withdraw with a shrug of resignation.

As mentioned earlier, the NHLPA told The Journal’s Hockey Hall of Fame member Jim Matheson, the league had a mediator appointed but bid this official goodbye within three days of appointment. The mediator should have had at least 14 days to arrange meetings, hear both sides out, and whatnot, the union complained.

NHL deputy commissioner Bill Daly explained it all: “Just going through all filing technicalities under Alberta law to ensure that to the extent we have to implement a League-wide lockout that we can lawfully do so. Exact same steps as were taken in 2004 and 1994. We view the process as pure formality, not substantive.”

Quite correct. It’s not as if the Edmonton Oilers and / or Calgary Flames were locking out their players. It’s the league.

So, the players decided to agree with the league’s notion that this kind of grievance only slows the CBA proceedings down, while adding nothing to the negotiations’ progress other than increasing the other side’s blood pressure.

Is this progress? Only if we’re grasping for straws.

In this context, it would be quite interesting to see what the NHLPA does in its other project: telling all and sundry the NHLPA is not registered as a union with the Quebec Labour Board and thus, Montreal Canadiens players can’t be locked out. The disenchanted players went so far as to hire a lawyer, and this legal beagle sent a cease-and-desist order to the Canadiens head office. Considering it would be Labour Board’s job to issue such order, the entire matter seems somewhat premature.

In any case, similar moves by the NHLPA have failed in the past, and so have moves in Ontario and British Columbia during the previous lockout. The question remains: all of this – and to what end?